Burn and Reconstructive Centers of Idaho, PLLC, DAB CR5642 (2020)

DECISION

Petitioner, Burn and Reconstructive Centers of Idaho, PLLC, is an Idaho-based supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that makes custom fabricated orthoses, custom diabetic shoes, and inserts.  It applied for enrollment in the Medicare program, but the Centers for Medicare & Medicaid Services (CMS) has denied its application.  Petitioner appeals that denial.

I find that CMS properly denied Petitioner’s enrollment because the supplier did not comply with DMEPOS supplier standards:  it was not operational at the address it listed on its enrollment application; and the inspector for the Medicare contractor was not able conduct an on-site inspection of its premises.

Background

In a letter dated October 14, 2019, the Medicare contractor, Palmetto GBA National Supplier Clearinghouse, advised Petitioner Burn and Reconstructive Centers that its application to enroll in the Medicare program was denied because it did not meet the requirements to qualify as a Medicare DMEPOS supplier.  Specifically, it did not comply with three supplier standards:

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• it did not maintain a physical facility on an appropriate site, as required by supplier standard # 7 (42 C.F.R. § 424.57(c)(7));
• the contractor’s inspector was not permitted to conduct an on-site inspection to determine the supplier’s compliance with certification standards, as required by supplier standard # 8 (42 C.F.R. § 424.57(c)(8)); and
• it did not have comprehensive liability insurance, as required by supplier standard # 10 (42 C.F.R. § 424.57(c)(10)).

CMS Ex. 5 at 1-2.

Petitioner sought reconsideration.  CMS Ex. 6 at 1.  In a reconsidered determination, dated December 17, 2019, the contractor upheld the denial.  CMS Ex. 2.  Petitioner requested review by an administrative law judge.

Although the parties have filed cross-motions for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.  In my initial order, I instructed the parties to list any proposed witnesses and to submit their written direct testimony.  Acknowledgment and Prehearing Order at 3, 5 (¶¶ 4, 8) (February 19, 2020).  The order also directed the parties to indicate which, if any, of the opposing side’s witnesses the party wished to cross-examine and explained that an in-person hearing would be needed only if a party wishes to cross-examine the opposing side’s witness.  Prehearing Order at 5-6 (¶¶ 9, 10).  Neither party lists any witnesses.  An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record without considering whether the standards for summary judgment are met.

With its motion and brief (CMS Br.), CMS submits eight exhibits (CMS Exs. 1-8).Somewhere between its list of undisputed facts and its argument, CMS seems to have lost track of the fact that this case involves denying Medicare enrollment, not revoking an already-enrolled supplier’s Medicare enrollment.  Nevertheless, Petitioner unmistakably understands that this is an enrollment denial and, relying on the notice letter and reconsidered determination, cites correctly the relevant regulations.  Compare, e.g., CMS Br. at 6 (erroneously citing 42 C.F.R. § 424.535) with P. Br. at 5 (citing correctly 42 C.F.R. § 424.530).  With its motion and brief (P. Br.), Petitioner submits four exhibits (P. Exs. 1-4).  In the absence of any objections, I admit into evidence CMS Exs. 1-8 and P. Exs. 1-4.

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Discussion

1.  CMS properly denied Petitioner’s enrollment application because it did not meet the Medicare standards for DMEPOS suppliers:  it was not operational at the address it listed on its enrollment application; and the inspector for the Medicare contractor was not able conduct an on-site inspection of its premises.I make this one finding of fact/conclusion of law.

Program requirements.  To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier, such as Petitioner, must be enrolled in the Medicare program and must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To obtain and keep that number, the supplier must be operational and must meet the standards set forth in 42 C.F.R. § 424.57(c).  CMS may deny the DMEPOS supplier billing privileges if it fails to do so.  42 C.F.R. § 424.57(c)(1) and (d); 42 C.F.R. § 424.530(a)(1), (5).

Supplier standard # 7.  A supplier must maintain a physical facility on an appropriate site.  Among other requirements, the location must be accessible to the public, Medicare beneficiaries, CMS, the Medicare contractor, and its agents.  It must be accessible and staffed during its posted hours of operation, and must maintain “a permanent visible sign in plain view” that posts the hours of operation.  If the business is located within a building complex, the sign must be visible at the main entrance of the building or the hours can be posted at the entrance of the supplier.  42 C.F.R. § 424.57(c)(7).

Supplier standard # 8.  A supplier must permit CMS, the contractor, or their agents to conduct on-site inspections to ascertain supplier compliance with certification standards.  42 C.F.R. § 424.57(c)(8).

Petitioner’s enrollment application and the site investigation.  The facts in this case are not in dispute.  On June 13, 2019, Petitioner submitted, via PECOS, its Medicare enrollment application, listing its physical address as “3100 Channing Way, Idaho Falls, ID.”  CMS Ex. 3 at 1, 2.CMS’s electronic filing system is referred to as PECOS (Provider Enrollment, Chain, and Ownership System).  On August 21, 2019, an inspector working for the Medicare contractor visited the address listed on its application and discovered that it was not the Petitioner’s practice location, but the Eastern Idaho Regional Medical Center.  She saw no signage for the Burn Center.  CMS Exs. 4, 8.  She learned that the Petitioner was located at 3200 Channing Way, Suite 206.  CMS Ex. 4 at 3.  Because Petitioner was not

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located at the address it had listed in its enrollment application, she was unable to inspect the premises.

Petitioner concedes that the address it listed on its enrollment application was not, in fact, its practice address, but argues that, when the address provided could not be verified, the contractor “had an affirmative duty to request clarifying information.”  P. Br. at 13-14.  Petitioner points to sections 15.5.4 and 15.7 of the Medicare Program Integrity Manual, which describe the application review and verification process for certain Medicare enrollment applications (CMS-855A, CMS-855B, CMS-855I, CMS-855R, CMS-855O, and CMS-20134).  Id.  But those sections do not govern DMEPOS enrollment applications (CMS-855S).In any event, manual provisions provide guidance to the contractors but they do not bind me; regulations do.  So long as CMS shows that one of the regulatory bases for denial exists, I may not refuse to apply the regulation, but must uphold the denial.  See  Wendell Foo DAB No. 2904 at 3 (2018); Wassim Younes, M.D. and Wassim Younes, M.D. P.L.C., DAB No. 2861 at 8 (2018) (citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016)).  Nothing in the statute, regulations, or manual provisions places an affirmative duty on the contractor (or CMS) to verify or correct address errors.

The Departmental Appeals Board has held, repeatedly, that a supplier must be operational at the practice location listed on its enrollment application.  Wendell Foo, M.D., DAB No. 2904 at 2, 21 (2018); Jason R. Bailey, M.D., P.A., DAB No. 2855 at 10 (2018).  By its own admission, Petitioner was not operational at the practice location it listed on its Medicare application, and the contractor was not able to conduct an on-site inspection.  CMS therefore justifiably denied its enrollment application under sections 424.57(c)(1) and (d) and 424.530(a)(1) and (5).

Petitioner also complains that it was not allowed to correct its application, which it first attempted to do (albeit obliquely) in its request for reconsideration, dated November 11, 2019.  P. Ex. 4; P. Br. at 6.  Putting aside CMS’s assertion that Petitioner did not submit the appropriate form (CMS-855S) for updating its address and Petitioner’s claim that the PECOS system made it too difficult to do so, it was simply too late.  When a Medicare contractor denies enrollment, appeal rights are limited to the supplier’s eligibility at the time the contractor makes the determination.  National Seating & Mobility, Inc., DAB No. 2984 at 10 (2020).

Liability insurance (Supplier standard # 10).  A supplier must have a comprehensive liability insurance policy in the amount of at least $300,000 that covers both the supplier’s place of business and all customers and employees.  42 C.F.R. § 424.57(c)(10).  CMS maintains that Petitioner did not have liability insurance for the place of business listed on its application form.  CMS Br. at 7.  Petitioner points out that it had liability

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insurance for its actual place of business (3200 Channing Way).  P. Br. at 15.  I need not decide whether this was sufficient to satisfy the supplier standard, however, because Petitioner’s failure to meet the requirements of supplier standards # 7 and # 8 justifies denial of its enrollment application.  CMS may deny enrollment if the supplier fails to comply with even one supplier standard.  ProMedical Equipment Supplies, LLC, DAB No. 2786 at 2 (2017); 1866ICPayDay, DAB No. 2289 at 13 (2009).

Conclusion

I find that CMS properly denied Petitioner’s enrollment because the supplier did not comply with DMEPOS supplier standards:  it was not operational at the address it listed on its enrollment application; and the inspector for the Medicare contractor was not able conduct an on-site inspection of its premises.